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    IBM Launches Smarter Commerce Strategy

    By
    Darryl K. Taft
    -
    March 14, 2011
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      IBM has launched a new initiative called “Smarter Commerce” that draws upon Big Blue’s software and services expertise to define a new market to meet new commerce challenges clients are facing in today’s social media and mobile computing landscape.

      Under this initiative, IBM announced new software and the creation of a new consulting practice dedicated to the emerging category of smarter commerce, which is focused on helping companies swiftly adapt to rising customer demands in today’s digitally transformed marketplace.

      Craig Hayman, general manager of IBM Software Industry Solutions, told eWEEK the Smarter Commerce effort began two years ago and is “the amalgamation of $2.5 billion in acquisitions we made in 2010, along with some organic technology we put in.”

      Indeed, IBM’s Smarter Commerce initiative builds on the foundation of the WebSphere Commerce platform and the company’s $2.5 billion investment in on-premises and cloud-based software from IBM’s acquisitions of Sterling Commerce, Unica and Coremetrics. IBM acquired Sterling Commerce for its order management and supply chain optimization technology. IBM bought Coremetrics for its capabilities for analyzing customer behavior. And the company purchased Unica for its software for managing marketing campaigns from beginning to end.

      “Although we had established this vision two years ago, as we announced these acquisitions we deliberately only told a piece of the story because we were still putting it together,” Hayman said.

      The new Smarter Commerce consulting practice leverages IBM’s leadership and investments in business analytics and optimization. The new software and services offerings, supported by global sales and marketing resources, will address the spectrum of enterprise commerce activities-new ways to buy, sell and secure greater customer loyalty in the era of mobile and social networks.

      Looking at the potential market opportunity, Hayman said IBM estimates the smarter commerce market to be worth up to $70 billion, driven by demand from clients that must bring new levels of automation to marketing, customer engagement and sales, as well as core processes for production, fulfillment and service for much more immediate responses to changes in markets and buying trends.

      IBM’s overall Smarter Commerce strategy includes:

      • A new global business services consulting practice offering deep insights into Smarter Commerce.
      • New cloud analytics software that enables companies to monitor their brands presence in real time through social media channels to better assess the effectiveness of new services and product offerings, fine-tune marketing campaigns and create sales initiatives in real time.
      • Software that automates a company’s ability to design and deliver a personalized shopping experience, campaigns and promotions on new services and products online, or through mobile devices.
      • An “IBM University” that will provide educational resources for sellers and partners to build the job skills required for the Smarter Commerce marketplace.

      “Smarter Commerce is an approach of how we’re making Smarter Planet real around a specific domain-buying and selling of goods and services,” Hayman told eWEEK.

      More Power in Hands of Customers

      IBM officials note that a shift is occurring as social networking and mobile communications are putting more power into the hands of customers. Today, 70 percent of a customer’s first interaction with a product or service takes place online, 64 percent of customers make a first purchase because of a digital experience, and of the 2 billion people connected to the Internet, more than 600 million are on Facebook. This is compounded by an explosion of mobile purchases, which is tripling annually to $119 billion this year alone.

      In a blog post on the new initiative, Steve Hamm, an IBM communications strategist, said:

      ““This big shift in how customers connect brings profound consequences-redefining the term ‘commerce.’ What used to be seen as a flow of goods from manufacturers through a distribution chain to customers has become an interactive feedback loop, where consumers, producers, distributors, the media, and marketers all have new roles to play. Smart companies see ‘selling’ not so much as a traditional function of their organization but rather as an ever-evolving set of services they perform for their customers-in concert with their business partners. Done well, when you market to individuals, it’s not an intrusion but truly is a service to the consumer.”“

      “It’s a buyer’s world now,” Hayman said in a statement. “Businesses require a tighter and highly responsive network of suppliers and partners to ensure they deliver the right product or service at the right price, time and place. The key to business success in this unfolding environment is predicting trends and automating market responses in advance to eliminate the gaps between buy and sell, supply and demand.”

      “If they are going to engage with customers that are more connected-but not necessarily more connected to the people making and selling products and services-businesses require a new set of capabilities that start with the ability to hear the global conversations taking place about their products and brands,” said Paul Papas, global Smarter Commerce practice leader in IBM Global Business Services, in a statement. “This new level of insight has to be followed by an entirely different kind of engagement with these customers, including a tighter and highly responsive network of suppliers and partners.”

      IBM is not alone in its effort to automate the sales and marketing process. Competitors such as Microsoft, Oracle and even Adobe Systems have signaled their intent to get more involved in the space. Most recently, Adobe launched a new effort aimed at automating the marketing process for customers.

      However, Hayman told eWEEK that a big difference between what IBM has put together and what competitors offer is that “each of the companies we acquired are leaders in their individual spaces, and we brought them together to deliver an end-to-end story.”

      Moreover, IBM is working with more than 2,000 global brands clients such as global food producer Danone, Mckesson Medical, Mousejaw Mountaineering, Staples, US Lumber and 1-800-FLOWERS to ensure they are marketing to the right audience at the right time; engaging buyers seamlessly in all the right channels and mediums; maintaining inventory levels precisely aligned to demand; and automating their supply chains for maximum efficiency.

      “Being competitive today means being a lot smarter about all facets of commerce, from initial marketing efforts to customer interaction in the buying and selling phase to the product delivery and subsequent service that ensure customer satisfaction,” said Steve Bozzo, chief information officer at 1-800-Flowers, in a statement. “We optimized our entire order lifecycle and improved the customer experience with a comprehensive solution from IBM that manages incoming orders from multiple channels like the Web and call centers in a timely accurate way.”

      Avatar
      Darryl K. Taft
      Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.

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